The Bureau of Internal Revenue has rolled out new guidelines aimed at making it faster and easier for businesses to close operations and cancel their tax registration, with micro taxpayers now eligible to receive tax clearances within three working days.
The reform was formalized through Revenue Memorandum Circular No. 47-2026 issued on May 19, as part of the implementation of Republic Act No. 11976, or the “Ease of Paying Taxes Act.”
BIR Commissioner Charlito Martin Mendoza described the move as the agency’s “Ease of Closing Business” reform, aligned with the administration’s push to improve government services and make tax administration more business-friendly.
“In line with President Ferdinand Marcos Jr.’s directive to make government services faster, better, and more responsive, and Finance Secretary Frederick Go’s push to make tax administration more investor-friendly and business-friendly, the BIR is making it easier for taxpayers who have already ceased operations to properly close their business and cancel their registration,” Mendoza said.
According to the BIR chief, the reform completes the government’s efforts to simplify processes not only for starting and operating businesses, but also for properly ending operations.
“If we make it easier to start and operate a business, then the government must also make it easier to properly close BIR registration once operations have already ceased,” he added.
Under the new guidelines, taxpayers who have stopped operations may now apply for closure or cancellation of registration either manually or electronically through their respective Revenue District Offices.
The BIR also reduced documentary requirements for closure applications.
Aside from the application form and surrender of original registration documents and permits, taxpayers will only need to submit an inventory of remaining goods and supplies, including capital goods for VAT-registered entities, as well as unused invoices and accounting forms together with their inventory list.
The circular further provides that penalties for non-filing of tax returns will stop accruing once taxpayers submit complete documentary requirements for closure or cancellation.
To prevent additional open cases, the taxpayer’s registered form types will automatically be placed under “deregistered” status upon submission of complete requirements.
However, the BIR clarified that filing for closure does not exempt taxpayers from possible audits to determine any outstanding liabilities.
Under the revised system, micro taxpayers will no longer undergo mandatory audits before closure approval.
For those without open cases or unpaid liabilities, tax clearances will be issued within three working days after submission of complete documents. Micro taxpayers with existing liabilities may also secure clearances within the same period after settling outstanding obligations and penalties.
Mendoza encouraged taxpayers who have already stopped operations to take advantage of the streamlined process to avoid the continued buildup of penalties and to ensure their records with the BIR are properly updated.